Business decision making
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Together with your friends you have decided to establish a small restaurant in Manchester because you believe that there is a big market for young people who want to dine out. You will need to find premises at a suitable location. You recognize that Manchester is a multicultural city and your restaurant will specialise in offering value for money meals using organic produce. Naturally before investing any money into the project, you have decided to collect data to find out if the restaurant will be successful or not. You are aware that the data collection must be done properly if any information that you extract from it is to be useful and reliable. Keeping this in mind, please answer the following questions:
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1.1 Create a plan for the collection of primary and secondary data that will be useful for the launch of your restaurant. Describe each of the stages that you will follow on your plan and justify the selection of methods of collecting data that you are going to use.
1.2 Explain, with justification, the sampling frame and survey methodology that will be most appropriate in your investigation. Which sampling techniques are most suited for this survey and why?
1.3 Design a questionnaire that you will use to collect primary data from UK customers using dichotomous, multiple choice and open ended questions.
This provides evidence for 1.1, 1.2, 1.3
The following are the sales and expenses figures for HMV for the past 18 years.
Year Sales Expenses £ Net Income £ Year Sales Expenses £ Net Income £
1995 15,000 20,000 2004 28,000 55,000
1996 20,000 25,000 2005 30,000 60,000
1997 24,000 30,000 2006 40,000 90,000
1998 20,000 40,000 2007 22,000 45,000
1999 18,000 35,000 2008 15,000 34,000
2000 25,000 50,000 2009 25,000 52,000
2001 20,000 45,000 2010 35,000 62,000
2002 30,000 65,000 2011 16,000 38,000
2003 24,000 45,000 2012 28,000 56,000
2.1 Use Excel software to calculate the mean, median and mode of the net income. You must copy and paste your spreadsheet onto the answer page.
2.2 Define mean, mode and median and explain the advantages and disadvantages of using each one of them. Analyse the results you calculated in 2.1 above and draw conclusions about the net income of HMV.
2.3 Use Excel to calculate the standard deviation of the net income of HMV. Explain how standard deviation is useful for HMV business purposes. Calculate the range about the mean within which approximately 95% of the net income values fall.
2.4 Use excel to calculate the correlation coefficient between sales expenses and net income.
Calculate the interquartile range and 80th percentile of the net income data.
Explain how HMV may use quartiles, percentiles and correlation coefficient to draw useful conclusions for the business.
This provides evidence for 2.1, 2.2, 2.3, 2.4
Scenario: The Managing Director of a company that packages olive oil imported from Italy to UK has hired you for the position of presentation and report writer. The managing director gives you the following types of data and asks you to make a report for the board of directors. Following is the different types of data sets the managing director has given you:
Television Advertising & Sales Figures from Year 1995 to 2010
Year Advertising £ Sales £ Year Advertising £ Sales £
1995 100 1200 2003 380 3200
1996 120 1400 2004 440 3750
1997 150 1500 2005 460 4460
1998 170 1800 2006 490 4820
1999 200 2200 2007 510 5000
2000 240 2300 2008 550 5670
2001 260 2400 2009 585 5900
2002 320 2780 2010 600 6300
3 (1) Produce a line graphs for advertising and sales figures from 1995 to 2010 and draw valid conclusions from the information derived.
3(ii) Produce pie charts and bar charts for the following net income generated by the five branches of the company and draw valid conclusions from the information derived.
Net Income Generated by the Five Branches of the Company in 2010
Net Income £
Birmingham Branch 2300
Coventry Branch 1400
Wolverhampton Branch 1000
Solihull Branch 1600
Stoke Branch 900
3 (iii) Produce histograms for hourly rate of different office employees of the company in 2012 using bin ranges 0-10,11-20,21-30,31-40,41-50,51-60,61-70 and 71-80 and draw valid conclusions from the information derived.
Hourly Rate of Different Rate of Office Employees
£ £ £ £
32 43 27 25
43 54 30 27
25 18 52 29
43 24 71 36
43 45 75 43
27 68 31 54
29 33 73 67
3.2 Produce a scatter graph of Sales figures using spread sheets and draw conclusions.
Create trend lines in the spread sheet graphs to assist in forecasting the business sales.
Obtain the linear equation of the line fitted in the scatter graph.
Explain the terms of the equation and use the linear equation to forecast sales for 24th month and 30thth month.
Use the Excel forecast- function to predict sales for the period Jan 2011 to June 2011.
3.3 Prepare a business presentation using suitable software to disseminate the information obtained in 3.1 and 3.2 effectively to the stakeholders in United Kingdom.
3.4 Produce a formal business report of the Olive Oil company discussing your findings.
This provides evidence for 3.1, 3.2, 3.3, 3.4
4.1 Explain the use of Management Information Systems in the operational, strategic and tactical functioning of an organisation. Give examples of software used at each level.
4.2 You are working with a team involved in completing a project to build a restaurant. The data for the construction project is as follows:
Foundation – 4
Framing Foundation 10
Plumbing Framing 9
Electrical Framing 6
Wall Board Plumbing/
Siding Framing 16
Paint Interior Wall Board 5
Paint Exterior Siding 9
Fixtures Int Paint/
4.2 Define project management and determine the critical path using network diagram. Explain the terms Early Start, Late Start, Early Finish, Late Finish, Slack, Dummy.
4.3 This project completed at a cost of £420,000.00. Your team has been given the following figures for cash inflows for the project and the company’s weighted average cost of capital is 12%.
Report on the financial viability of this project using NPV and IRR.
Year Cash inflows (£million)